Tflow® Signs of a trade failure – illustrating USDJPY

1. Last Thursday, when my internet failed (and when phone doesn’t tethered and when I also forgot to bring my wireless mifi back home), I was desperately trying to restore it with all frantic calls to network provider (whom offered their assistance 4 days later), I had to close most of my trades (on protective measures). Had to restore connectivity on the very same day as I still have my US stocks and options positions to manage

I was totally overwhelmed with the chain of unforeseen events, let alone tolerate any other issues arising

2. Internet was restored *phew*. But due to protective measures, most trades were either break even or closed at some losses. Worse, I had to see some trades travel to target profit later. It was emotionally weak

3. On the very same day (thursday night), I was feeling sick. Throat was itchy and was sniffing all night

Don’t consider trading when about to fall sick, makes the brain works slower

4. Next day friday, I broke one rule: Never to trade during Non Farm Payroll (NFP) day. And I called for one trade which is the outcome of bad psychology and poor judgement

This was a failure trade of course. And it is not surprise to see this trade fail. I blamed my carelessness, and not having it checked properly. Most of the time I was careful, but it was the above events that led to a failure in my psychology. The way to remedy is to remember it for life by recording it down. And I don’t feel proud at all.

Tflow® Signs of a trade failure

Let me go through what are the signs to identify when a trade has failed

1. The key level which I mentioned in USDJPY was 9950. This means that price will need to stay above 9950 for this trade to be valid. If there is a H1 (first sign) close below 9950 and ultimately a H4 close below 9950, it means this trade is no longer good. I was eventually stopped out at 40 pips loss

2. Use F6 to judge if price has strength to travel to point 1. You could draw F6 from Pt 1 to 4 to see if there is a close above F6. If eventually no, then this trade has no strength to travel up (if bullish) or travel down (if bearish)

Price did not close above F6

3. 13TL not cleared. Key resistance not cleared too

Key resistance not cleared

Final words

Upon review, this trade was made with the right steps, but there are certain key levels not considered. Looking back, I will reflect on how not to make this mistake again but 3 things concluded:

1. never make a trade when you are psychologically affected

2. whatever it is, make sure all levels are properly checked

3. don’t be desperate to trade, the market is always there

With this, I do apologise for the failure of this trade which could be avoided definitely. I hope by sharing, you learnt something too.

Thanks for sharing Binni, good learning lesson, especially F6 concept which I have to confess I always missed this. Nevertheless, the trade goes against you during NFP. Just wondering and thinking aloud, will it helps if we shift trade to BE during major news announcement? I recalled you mentioned in class that 30 mins after major news release are irrationale and direction is only clearer after the 30 mins. Anyway, do take care and get well soon.

Price action trading can be easy with Tflow®
Price action trading works very well when currency trader combines price information into a rule based approach. In this post, we look at price action ‘boxes’ drawn on MT4 to visualise trend. Example with EURCAD.